Wisdom Of Regulators? ... Systemic Risk Group Formed To Supervise Wall Street

Group Forms to Urge Strict Oversight of Wall Street ... Efforts to increase and improve regulation of Wall Street have bogged down, according to Sheila C. Bair, the former chairwoman of the Federal Deposit Insurance Corporation. On Wednesday, she will announce a new group, the Systemic Risk Council, that will monitor and encourage regulatory reform ... The organization is being formed by the Pew Charitable Trusts, where Ms. Bair now works, and the CFA Institute, an organization of financial analysts. – New York Times

Dominant Social Theme: Since Wall Street can't run itself we'll provide the leadership.

Free-Market Analysis: So a new group will do what Wall Street won't – bring sanity to finance! Or will it ...

Imagine, however, that a group was formed to provide oversight to the risks undertaken by, say, the auto industry – or ... cruise lines. Wouldn't this be seen as overreach?

How can individuals outside of an industry calculate the risks in a given industry better than the participants? It's the height of arrogance, it seems to us, though granted that Wall Street is an unusual place, fueled by the high-powered money of central banking.

Without central banking and the fiat-monopoly dollar, there would be no Wall Street as we know it today. Wall Street would be what it is supposed to be, a venue for raising capital and trading assets, securitized or not.

It would be a small, low-key place. In fact, get rid of government bonds and it would be smaller still. There would likely be a great deal fewer masters of the universe. Without central banking, banks themselves would deflate.

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